Real Estate Investor November 2021 | Page 72

Property management encompasses rental management , wherein the former also includes facilities management and could also involve the operations within a body corporate setup .

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Managing Residential &
Commercial Property ? There is a huge difference between managing a residential and a commercial property . In a residential property , it is commonly known that the landlord would fix the property and hand it over to the tenant for use as a place of residence . And when the contract terminates , the tenant is expected to return the property as they found it or better .
Whereas , in commercial property , the tenant may receive the property as a white box or without much character and they would then convert it into what the business requires and be branded accordingly to represent the business . The leases for commercial properties usually have a longer duration than residential properties .

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Ensuring Compliance & Professional Management
of a Property It is important that real estate agencies understand legislation surrounding rental property rights for both tenants and landlords . These would generally be the Rental Housing Act ( RHA ), the Consumer Protection Act ( CPA ) as well as the Estate Agency Code of Conduct .

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Landlord ' s Mistakes on Rental Management of a Property ? Paradoxically , the first and foremost aspect the landlord has to look out for is who they mandate to rent the property out on their behalf . If the ideal property practitioner is appointed , they ensure that they clarify processes and responsibilities of all parties in the rental agreement , so that when the process starts , there are no surprises .
The landlord must also ensure that they understand the mandate given to the agent , understand the lease agreement and whether the agreement with the agent is merely from procurement of a tenant or to include managing the rental on a monthly basis .
Some of the mistakes could be where a landlord relies entirely on the rental income to service the bond or to pay other expenses ; hence every landlord should leave room for vacancy and no rent income periods . This means that a landlord must have cash reserves to mitigate instances where tenants have delayed payment or not paid . Landlords should also realise that when the property is in a bad condition where they are responsible for the repairs , and this doesn ’ t happen , then the damages continue and this could devalue the property or cause the required restoration costs to skyrocket .
SA Real Estate Investor Magazine NOV 2021 35
BOUTIQUE ASSET-BACKED INVESTMENTS Fixed Annual Returns On Capital FSP 13370 ACTIVE INVESTMENT INFORMATION ENDULINI CONSTRUCTION FUNDING - PHASE 2 INVESTMENT SUMMARY RISK PROFILE LOW MEDIUM MEDIUM HIGH MARKET ANALYSIS RISK ANALYSIS Investors are invited to provide funding for Endulini, a residential The site of the development is very well located. Brackenfell is a development in the suburb of Brackenfell in Cape Town. The Developer popular and safe residential area in the Northern Suburbs of Cape has started with the development of the project comprising 61 sectional Town. The development is surrounded by houses and townhouses in title apartments within a secure gated environment. The installation of what is an established, traditional area. In addition, the development the services is complete and the units in Phase 1 are in construction. is in proximity to the Cape Gate regional shopping centre, the Cape 24 Units in Phase 1 have been sold. Funding required for Phase 2 of the Gate Medi-Clinic private hospital, Kuils River Golf Course, Curro project is R 9 500 000, with the minimum investment amount limited to School and large flagship amenities such as Checkers Hyper and R 100 000. Investments receive fixed returns calculated as follows: Pick n Pay Hypermarket project timelines. Investment level R 100 000 - R 499 000 (14% p/a) This is an exceptionally desirable residential area and the demand Rollover/Reinvestment options at end of term Investment level R 500 000 - R 999 000 (16% p/a) for 2-bedroom units is high, catering to a broad market of owner- Investment level R 1000 000 plus occupiers, investors and renters. LOW MEDIUM HIGH INVESTMENT TERM (PROJECTED) 1YR 2YR 3YR 4YR 5YR The length of the investment is an approximation – based on (18% p/a) This remains one of the best The returns are paid out with the initial capital at the end of the rentals alike. investment cycle. Unique to the offering is a double-tier security structure, made up of a 1st covering bond over the development land access to the funding of residential development projects. The result and a linking of the investment to a specific unit/s in the development being fixed per annum returns based on pre-determined, projected as security. The protection of investor funds is managed by the Noble time-frames with fixed capital assets employed to protect invested funds. Shield 1 Security Trust. The investment period is projected to be for Project in high demand area of CT Developer Risk Developer cannot access funds without independent authorisation Project in high demand price category Investor not linked to Devco via shareholding Operational Risk Financial - specific funds allocation Investor Risk Investment is asset-backed Underlying investment project As can be seen by chart 155 supply Estate Freehold investment as security is transferred to the end-buyer of the property, A 2-tier structure is employed to protect invested funds, which includes 1st Covering bond over the development to protect investors. Investments Freehold Estate Sectional title Freehold Apartment Complex either have the funds repaid to them or to roll their investment funds Freehold over into subsequent investment cycles to prolong the investment. are backed by fixed assets within the underlying investment project. Until investors are repaid the assets are their security. This is elaborated upon Sectional Scheme with more detailed documentation and in discussion. 14% - 18% per annum (dependent on level of investment AMT) Min Investment R 100 000 Total investment requirement R 9 500 000 654 THE ENDULINI DEVELOPMENT Endulini will be a secure access-controlled complex. The homes development is beautifully located on the crest of a hill, with most INVESTMENT FEES The funds aim is units being afforded uninterrupted views. This development falls in an established area undergoing rapid expansion on its outskirts to cater All returns quoted net of fees. for the huge demand of the middle-income community. The demand Fees absorbed by Development Company for 2-bedroom units in established, safe areas such as this is very high. The properties are aimed at the predominant middle-income sector 5 YEAR INVESTMENT PERFORMANCE (AS P/A % RETURNS) VS CPI with apartments falling within the R 1.25 - R 1.5 Million range. This broadly ensures the properties will be in the pricing category which is among 5 Year investment performance (as p/a % returns) vs CPI 25 the most popular and highly absorbable in the greater Cape Town area. 20 15 10 5 CPI Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 INVESTMENT CONSIDERATION GROWTH AND ACTIVITY are all 2-bedroom properties with a choice of 1 or 2 bathrooms. All units will include a patio or balcony with a braai. The site of the CPI INVESTMENT SECURITY accrued interest. At this time investors may exercise their option to at which stage the Attorneys will repay the investor capital plus Western Cape OPC Period – sectional title properties Endulini development - Brackenfell, Cape Town, Geographic Location Cost increases factored in Funds flow via Attorneys 1393 Individual investors exit when the completed unit linked to their Real Estate Abundance of labour supply Pre-determined returns for investor (apartments) are in short KEY INVESTMENT INFORMATION Classification RISK NEGATED Investor liquidity - access to funds Title STOCK IN AREA COMPOSITION Chart OF PROPERTY approximately 12 months. Market Risk performing middle-income residential areas in SA for sales and The aim is to provide private investors alternative diversification with 0 RISK AREAS Experienced team driving all aspects INVESTMENT OBJECTIVE Investment Returns POTENTIAL RISKS The unique structure of the investments has been crafted to offer attractive returns within a risk-managed investment environment. While the team of experts do a great deal to ensure the timely completion of projects, property development does have some unique risks: Therefore the invitation is to investors who understand (i) the nature of these Total Property Value (R'000) 250 000 200 000 investments, (ii) the security structures and (iii), where this investment fits into their larger profile. 150 000 100 000 50 000 0 2011 2012 2013 2014 2015 2016 Sectional Scheme 2017 Erf 2018 2019 2020 2021 Investment Disclaimer: This is a private placement. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will either be suitable or profitable for a Lender or prospective Lender’s investment portfolio. No investors or prospective investors should assume that any information presented and/or made available by Opportunity Private Capital or its Associates is a substitute for personalized individual advice from an advisor or any other investment professional. No guarantees as to the success of the investment or the projected return are offered. They have undertaken to present as much factual information as is available. Every precaution has been taken to offer sufficient security for the investment monies given by investors. 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